Wednesday, August 8, 2012

Marc Faber: Market May Rally Into August, But a Tough Sept-Oct Dead Ahead

This Trade Has 10 Times As Much Upside As Downside

Sometimes you just have to scream.

"Come on!" I yelled at my computer screen as the symbol "GOLD" streamed across it in bright green lettering. "Just a couple more bucks!"

The precious yellow metal was breaking out of the chart pattern I showed you last week. If it could just close above $1,625 per ounce, it would set the stage for a much larger move higher. And we could finally buy it aggressively – which is what I've been waiting for since gold peaked above $1,900 last August.

But it didn't happen. Instead of breaking out, gold "faked out" and stumbled back into the consolidation pattern that has trapped its price for the past three months. Here's an updated chart...

Gold did manage to break out of its consolidating-triangle pattern (the blue lines) last week. That breakout ignited a move right up to resistance at $1,625. Remember... that's the price I said gold had to get over to shift into "rally mode."

But that resistance proved to be too tough. The breakout turned into a "fake out." Gold tumbled right back to the point where it broke out of the triangle pattern.

If you're bullish on gold, this is an excellent, low-risk area to buy it. Gold is either going to find support right here at $1,593 and bounce... or it's going to fall back into its triangle pattern and stop you out of the trade for a small loss.

Here's how I'm planning to trade it...

Buy gold here at $1,593. If it bounces, it should take another run at $1,625, and it should be easier to break above that resistance level on the second attempt. That would kick off the rally I wrote about last week, and possibly carry the metal all the way up to the February highs at $1,775.

On the other hand, if gold falls through support at $1,593 (on a closing basis), it has more support at the rising uptrend line of the triangle – near $1,575. If gold can't hold above $1,575, close your position. The metal will be on its way to testing its May low at $1,550... And if it can't hold on there, it could lose another $100 per ounce.

Buying gold here at $1,593 offers the potential upside of $182 per ounce. If support doesn't hold and gold starts to fall, you can exit the trade and take an $18 per ounce loss.

That's 10 times as much reward to risk. And that's too good to pass up.

3 Beaten-Down Retailers Poised to Make a Comeback

When it comes to trading, there are myriad styles, methods and techniques. Two of the most popular camps, and also the most divergent, are the "buy-the-momentum" crowd and the "buy-the-bloodied" mob.

Personally, I'm a bigger fan of buying stocks when they're breaking out to new 52-week highs due to strong technical and fundamental factors, as I think that gives traders the best chance to make real money. However, I never want to turn my nose up at opportunity when I see it, and I see it right now in three severely beaten-down retailers.

The first of these out-of-favor fashion stocks is Abercrombie & Fitch (NYSE: ANF). The teen clothing merchant, known for its sexually tinged and provocative ad campaigns, has been one of Wall Street's biggest retail duds over the past year. Prior to the early August plunge, the stock had already been down nearly 30% year to date; however, that loss accelerated another 10% after ANF issued a ghastly forecast for a decline in same-store sales in the second half of the year.

The retailer also lowered its full-year earnings forecast, saying that it now expects earnings per share will be $2.50 to $2.75, compared to previous estimates of $3.50 to $3.75. The Street was expecting to see EPS of $3.36.

ANF Chart

The chart of ANF above shows the price destruction that's taken place in the shares, but for traders looking to get into this battered play, now may be a great bargain-buying opportunity before the company reports earnings on Aug. 15. If ANF manages to even get close to lowered expectations, we could see a nice pop in the shares. Given the fact that the stock is trading at multi-year lows, now could be the best sale the store has offered in a long time. (more)

This Is Why Gold & Oil May Explode Higher In August

from KingWorldNews:

Today acclaimed commodity trader Dan Norcini told KWN, “One spark for gold may be at some point in August we begin to have rumors about what is going to happen at the Jackson Hole meeting. The first round of QE was announced during that Jackson Hole Summit in late 2008. So the upcoming meeting may wind up being very significant when it comes to which direction central planners are going to take.

You may very well get a lift in gold based on the type of monetary response that may come out of Jackson Hole. The other situation which could escalate and have a huge impact in the key markets, particularly crude oil and gold, is the disintegration that is taking place in Syria.

If the war begins to engulf a broader scope of the Middle-East, bringing Israel and Iran into conflict, that powder keg could create an explosion higher in the price of both crude oil and gold…. ”

Dan Norcini continues @

20% Gain Potential in Just Three Months – Trading This Hated Metal

You're not going to want to hear this. No one wants to hear it right now...

But we have an incredible opportunity to buy silver.

It doesn't feel good to trade precious metals here. Gold is down more than 10% from its highs this year. Platinum is down 20%. Silver is down about 27%.

But here's the thing: Everyone feels bad about precious metals... Silver in particular. And that's why it's such a big opportunity. Based on history, we can expect to make 20% or more over the next three months... by simply buying silver today.

Better yet, if this situation kicks off a new bull market – like it has three of the last four times – we have the potential to make even larger gains, as much as 100%, in the next six to 12 months.

Let me explain...

As I said, silver is hated right now. Specifically, futures traders speculating on silver are near all-time "short" levels today. As a rule, when futures traders all think the same thing, the market tends to do the opposite.

You can see it in the chart below...

When the blue line is high, silver traders are going long – and we expect silver to fall. When the blue line is low, silver traders are short... The contrarian investment is to buy silver.

You can see that silver traders are near all-time short levels today. In fact, we've only seen this extreme level four other times in the last seven years.

Every time was a great opportunity to buy silver. (more)

Life Time Fitness, Inc. (NYSE: LTM)

Life Time Fitness, Inc. engages in designing, building, and operating sports and athletic, professional fitness, family recreation, and spa centers. It offers programs in various areas, such as group fitness, yoga, swimming, running, racquetball, squash, tennis, pilates, mixed combat arts, kids activities and camps, adult activities and leagues, rock climbing, cycling, basketball, personal training, weight loss and nutrition initiatives, spa, medi-spa, and chiropractic service areas. The company, through its LifeCafes and, provides nutritional products, including men's and women's performance multivitamins, omega-3 fish oil, joint maintenance formulation, lean source soft gels, and whey protein isolate, as well as FastFuel Complete, a meal replacement product. In addition, it publishes a magazine that includes articles on nutrition and healthy eating, health and wellness, exercise and active adventure, stress-management, personal development, and other quality-of-life topics under the Experience Life name; and operates a full-service restaurant. Further, the company produces athletic events comprising running, cycling, and triathlon events from entry-level to ultra-endurance, as well as offers health assessments services.

To analyze Life Time's stock for potential trading opportunities, please take a look at the 1-year chart of LTM (Life Time Fitness, Inc) below with my added notations:

I like LTM's chart because of the one simple level at $48. Not only can you see the $48 support (green) from earlier in the year, but the $48 resistance (red) has been very obvious over the last (3) months and again back in December and January. So, the $48 price is key to this stock. If the stock were to move above $48, the $52 level (blue) would come back into play as well.

The Tale of the Tape: LTM presents a couple of very simple trading opportunities based on its key level of $48. A short position could be entered on a rally up to the $48 resistance with a stop above that level. A long play could be made on a break above $48 with an expectation of a run to $52.


“All the world is made of faith, and trust, and pixie dust.”J.M. Barrie – Peter Pan

“The issue which has swept down the centuries and which will have to be fought sooner or later is the people versus the banks.”Lord Acton

Who do you trust? Do you trust the President? Do you trust Congress? Do you trust the Treasury Secretary? Do you trust the Federal Reserve? Do you trust the Supreme Court? Do you trust the Military Industrial Complex? Do you trust Wall Street bankers? Do you trust the SEC? Do you trust any government agency or regulator? Do you trust the corporate mainstream media? Do you trust Washington think tanks? Do you trust Madison Avenue PR maggots? Do you trust PACs? Do you trust lobbyists? Do you trust government unions? Do you trust the National Association of Realtors? Do you trust mega-corporation CEOs? Do you trust economists? Do you trust billionaires? Do you trust some anonymous blogger? You can’t even trust your parish priest or college football coach anymore. A civilized society cannot function without trust. The downward spiral of trust enveloping the world is destroying our global economy and will lead to collapse, chaos and bloodshed. The major blame for this crisis sits squarely on the shoulders of crony capitalists that rule our country, but the willful ignorance and lack of civic accountability from the general population has contributed to this impending calamity. Those in control won’t reveal the truth and the populace don’t want to know the truth – a match made in heaven – or hell.

“Most ignorance is vincible ignorance. We don’t know because we don’t want to know.” – Aldous Huxley

The fact that 86% of American adults have never heard of Jamie Dimon should suffice as proof regarding the all-encompassing level of ignorance in this country. As the world staggers under the unbearable weight of debt built up over decades, to fund a fantasyland dream of McMansions, luxury automobiles, iGadgets, 3D HDTVs, exotic vacations, bling, government provided pensions, free healthcare that makes us sicker, welfare for the needy and the greedy, free education that makes us dumber, and endless wars of choice, the realization that this debt financed Ponzi scheme was nothing but a handful of pixie dust sprinkled by corrupt politicians and criminal bankers across the globe is beginning to set in. A law abiding society that is supposed to be based on principles of free market capitalism must function in a lawful manner, with the participants being able to trust the parties they do business with. When trust in politicians, regulators, corporate leaders and bankers dissipates, anarchy, lawlessness, unscrupulous greed, looting, pillaging and eventually crisis and panic engulf the system. (more)

Chart of the Day - Scripps Networks Interactive (SNI)

The "Chart of the Day" is Scripps Networks Interactive (SNI), which showed up on Monday's Barchart "All-Time High" list. Scripps on Monday posted a new all-time high and closed +1.11%. TrendSpotter just turned long again on Monday's close of $58.10. In recent news on the stock, Scripts networks on Aug 2 reported Q2 EPS of 93 cents, better than the analyst consensus of 87 cents. Goldman on July 12 upgraded Scripps Networks to Buy from Sell and raised the target to $63 from $50 due to strong TV ratings. Scripps Networks Interactive, with a market cap of $8 billion, is the leading developer of lifestyle-oriented content for television and the Internet. The company's media portfolio includes: Lifestyle Media, with popular lifestyle television and Internet brands HGTV, Food Network, DIY Network, Fine Living Network and country music network Great American Country (GAC); and Interactive Services, with leading online search and comparison shopping services, Shopzilla and uSwitch.